AXE COMPUTE INC.
For the period ended Mar 31, 2025. Filed May 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 14, 2025
AGPU$6.73+11.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001171843-24-006292
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001171843-25-003182
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 50 previous paragraphs and 45 current paragraphs.
16 unchanged; 15 reworded; 14 added; 19 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Recent Developments
Current report
On January 1, 2025, we entered into a binding letter of intent (the “LOI”) with Renovaro, Inc. (NASDAQ: RENB) (“Renovaro”) for Predictive Oncology to be acquired by Renovaro (the “Renovaro Merger”). Under the terms of the LOI, Predictive Oncology would be merged into Renovaro in exchange for a newly created series of preferred stock of Renovaro. On February 28, 2025, we entered into an extension agreement with Renovaro (the “Extension Agreement”), pursuant to which the parties amended certain terms of the LOI, including to extend the outside termination date of the LOI from February 28, 2025 to March 31, 2025. No definitive purchase agreement was executed as of March 31, 2025 and the LOI terminated on that date, pursuant to its terms. On April 3, 2025, our Board of Directors notified Renovaro of our decision to discontinue discussions regarding the proposed merger between the two companies. We have no further obligations with respect to the Renovaro Merger, including under the LOI or the Extension Agreement. On May 8, 2025, Renovaro filed a lawsuit in Delaware Chancery Court claiming breaches by our company of the LOI and the Extension Agreement and seeking to compel our company to enter into a merger agreement with Renovaro. We do not believe the lawsuit has merit and plan to contest it vigorously.
Current report
On March 14, 2025, we entered into an asset purchase agreement and closed the transactions contemplated therein with DeRoyal Industries, Inc. (“DeRoyal”), to sell and assign to DeRoyal assets and liabilities exclusively related to the business of providing products for automated, direct-to-drain medical fluid disposal, including our STREAMWAY® product line, in exchange for a total purchase price of $625,000, plus the assumption of certain liabilities.
Current report
In July 2024, our Board of Directors approved a plan to dispose of the assets and discontinue the operations of our Birmingham laboratory. On March 14, 2025, we entered into an asset purchase agreement and closed the transactions contemplated therein with DeRoyal Industries, Inc. (“DeRoyal”), to sell and assign to DeRoyal assets and liabilities exclusively related to the business of providing products for automated, direct-to-drain medical fluid disposal, including the STREAMWAY® product line, in exchange for a total purchase price of $625,000, plus the assumption of certain liabilities.
Current report
Revenue. We recorded revenue of $110,310 and $4,858 in the three months ended March 31, 2025, and 2024, respectively. The increase in revenue from the comparative period was primarily due to completion of a tumor-specific 3D model in the three months ended March 31, 2025. No 3D models were completed in the comparable 2024 period.
Current report
Operations, research and development expenses. Operations, research and development expenses primarily consist of expenses related to product development, prototyping, and testing. Operations, research and development expenses decreased by $109,679 to $520,406 in the three months ended March 31, 2025, compared to $630,085 in the comparable period in 2024. The decrease was primarily due to decreased employee compensation resulting from lower headcount and decreased purchases of laboratory supplies.
Current report
On March 31, 2025, we had $3,087,588 in cash and cash equivalents from continuing operations. Cash and cash equivalents increased by $2,368,341 from December 31, 2024, due to the following factors.
Current report
Net cash used in operating activities of continuing operations was $985,840 in the three months ended March 31, 2025, compared to $2,709,688 in the three months ended March 31, 2024. Cash used in operating activities of continuing operations decreased in the 2025 period primarily due to lower cash operating losses and decreased cash used in working capital. Changes in cash used in working capital included increases in accounts payable and other current liabilities, offset by a decrease in contract liabilities and operating lease liabilities. The increase in other current liabilities was primarily due to a payment of $964,389 received from Renovaro associated with its request for issuance of additional shares of our common stock, which we rejected due to the failure to meet the conditions for such issuance pursuant to the terms of the Extension Agreement. We returned such payment to Renovaro in April 2025 following our decision to discontinue merger discussions.
Current report
No cash was used in investing activities of continuing operations in the three months ended March 31, 2025, while $3,032 was used in investing activities of continuing operations in the three months ended March 31, 2024 to acquire property and equipment.
Current report
Registered Direct Offering
Current report
On February 18, 2025, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with several institutional and accredited investors for the sale by us of 363,336 shares (the “Registered Direct Offering Shares”) of our common stock, par value $0.01 per share, at a purchase price of $1.50 per share, in a registered direct offering. The offering closed on February 19, 2025. Our gross proceeds from the offering were approximately $545,004, before deducting the placement agent’s fees and other offering expenses. We offered and sold the Registered Direct Offering Shares pursuant to an effective shelf registration statement on Form S-3, which was filed with the SEC on May 21, 2024, and subsequently declared effective on May 21, 2024 (File No. 333-279123), and a related prospectus supplement filed on February 19, 2025.
Current report
Renovaro Subscription Agreement
Current report
On March 13, 2025, we executed a share subscription agreement with Renovaro, pursuant to the Extension Agreement dated February 28, 2025, that amended the previous LOI between the parties. Pursuant to the share subscription agreement, Renovaro subscribed to purchase and we agreed to sell 467,290 unregistered shares of our common stock at a price of $1.07 per share for a total purchase price of $500,000.
Current report
**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Removed paragraphs (19)
Previous report
ITEM 2. MANAGEMENT**’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous report
During the third quarter of 2024, our former Birmingham operating segment met the criteria under US GAAP to be reported as discontinued operations. As a result, we operate in two business areas. In our first area, we provide optimized, high-confidence drug-response predictions through the application of AI using our proprietary biobank of tumor samples to enable a more informed selection of drug/tumor combinations and increase the probability of success during development. We also create and develop tumor-specific 3D cell culture models mimicking the physiological environment of human tissue enabling better-informed decision-making during development. In our second business area, we produce the United States Food and Drug Administration (“FDA”)-cleared STREAMWAY® System and associated products for automated medical fluid waste management and patient-to-drain medical fluid disposal.
Previous report
As a result of the decision to discontinue our former Birmingham operating segment, we have two reportable segments, which have been delineated by location and business area:
Previous report
In July 2024, our Board of Directors approved a plan to implement a strategic cost savings initiative, primarily related to the Company’s Birmingham laboratory. After extensive consideration, we decided that transferring the laboratory equipment and related product/service lines from Birmingham to Pittsburgh would not be a strategic and effective use of Company resources. In aggregate, the disposal of the assets comprising the former Birmingham operating segment resulted in a strategic shift that had a major effect on our operations and financial results.
Previous report
Revenue. We recorded revenue of $345,686 and $676,626 in the three months ended September 30, 2024, and 2023, respectively. Revenue in the three months ended September 30, 2024, was primarily derived from the Eagan operating segment, while revenue in the three months ended September 30, 2023, was primarily derived from the Pittsburgh operating segment. The decrease in revenue from the comparative period was primarily due to decreased sales of tumor-specific 3D cell culture models from the Pittsburgh operating segment, offset by increased sales of STREAMWAY systems during the third quarter of 2024 from the Eagan operating segment.
Previous report
We recorded revenue of $1,012,232 and $1,308,102 in the nine months ended September 30, 2024, and 2023, respectively. Revenue in the nine months ended September 30, 2024, and 2023, was primarily derived from the Eagan operating segment. The decrease in revenue from the comparative nine-month period was also primarily due to decreased sales of tumor-specific 3D cell culture models in 2024 from the Pittsburgh operating segment, offset by increased sales of STREAMWAY systems during 2024 from the Eagan operating segment.
Previous report
Cost of sales was $535,511 and $367,461 in the nine months ended September 30, 2024, and 2023, respectively. The gross profit margin was approximately 47% and 72% in the nine months ended September 30, 2024, and 2023, respectively. The decline in gross profit margin for the nine months ended September 30, 2024, was also primarily due to increased labor costs and the change in sales mix with decreased sales of 3D models with higher margins than STREAMWAY systems.
Previous report
G&A expense decreased by $988,541 to $5,834,783 in the nine months ended September 30, 2024, compared to $6,823,324 in the comparable period in 2023. The decrease was primarily due to decreased employee compensation due to lower headcount and decreased investor relations costs, offset by increased audit fees and consultant fees.
Previous report
Operations expense. Operations expense primarily consists of expenses related to product development and prototyping and testing. Operations expense decreased by $5,274 to $633,422 in the three months ended September 30, 2024 compared to $638,696 in the comparable period in 2023. The minor decrease was primarily due to decreased cloud computing expenses resulting from cost saving efforts, offset by increased costs associated with our Pittsburgh laboratory including supplies and maintenance.
Previous report
Operations expense increased by $88,962 to $2,188,936 in the nine months ended September 30, 2024, compared to $2,099,974 in the comparable period in 2023. The increase was primarily due to higher employee compensation, offset by lower cloud computing expenses and recruiting fees.
Previous report
Sales and marketing expense increased by $156,412 to $1,268,824 in the nine months ended September 30, 2024, compared to $1,112,412 in the comparable period in 2023. The increase was primarily due to severance related to a former executive, offset by lower other employee compensation costs related to lower headcount and sales commissions.
Previous report
Other income. We earned other income of $36,378 during the three months ended September 30, 2024, compared to $47,838 in the comparable period in 2023. We earned other income of $64,497 during the nine months ended September 30, 2024, compared to $118,618 in the comparable period in 2023. Other income in all periods primarily consisted of interest income on cash and cash equivalents.
Previous report
Other expense. We incurred other expense of $5,822 during the three months ended September 30, 2024, compared to $60,671 in the comparable period in 2023. We incurred other expense of $9,393 during the nine months ended September 30, 2024, compared to $60,671 in the comparable period in 2023. Other expense in 2024 consisted primarily of interest expense, while other expense in 2023 was primarily due to the write off of a note receivable deemed uncollectible.
Previous report
Gain on derivative instruments. We recorded a gain of $7 in the three months ended September 30, 2024, compared to $3,463 in the comparable period in 2023. We recorded a gain of $1,375 in the nine months ended September 30, 2024, compared to $11,724 in the comparable period in 2023. These gains related to the change in fair value of the derivative instruments.
Previous report
Net cash used in operating activities of continuing operations was $8,913,589 and $9,060,285 for the nine months ended September 30, 2024, and 2023, respectively. Cash used in operating activities decreased in the 2024 period primarily because of changes in working capital.
Previous report
Net cash used in investing activities of continuing operations was $9,510 and $63,052 for the nine months ended September 30, 2024, and 2023, respectively. Cash used in investing activities decreased in the 2024 period primarily due to a decrease in fixed asset purchases during the nine months ended September 30, 2024, as compared to the same period in 2023.
Previous report
On May 3, 2024, the Company entered into an ATM Sales Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), to sell shares of the Company’s common stock, par value $0.01 per share (the “Shares”), having an aggregate sales price of up to $3,696,000, from time to time, through an “at the market offering” program pursuant to which Wainwright acted as sales agent. Subject to the terms and conditions of the Sales Agreement, Wainwright was permitted to sell the Shares by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. Under the Sales Agreement, Wainwright was entitled to compensation for its services of 3.0% of the gross sales price of all shares sold through Wainwright under the Sales Agreement. As of June 30, 2024, the Company sold 1,607,100 shares of common stock at an average price of approximately $2.30 per share, resulting in aggregate gross proceeds of approximately $3,696,000. No further shares are available to be sold under the Sales Agreement.
Previous report
On July 25, 2024, the Company entered into definitive agreements with certain of its existing warrant holders for the exercise of warrants to purchase an aggregate of 958,117 shares of its common stock having a current exercise price of $14.00 originally issued in February 2021, June 2021 and May 2022, at a reduced exercise price of $1.32 per share. The gross proceeds to the Company from the exercise of the existing warrants were approximately $1,265,000, prior to deducting placement agent fees and transaction expenses payable by the Company.
Previous report
In consideration for the immediate cash exercise of the warrants, the Company concurrently issued to the warrant holders new unregistered Series A warrants to purchase up to 958,117 shares of common stock (the “Series A Warrants”) and new Series B warrants to purchase up to 958,117 shares of common stock (the “Series B Warrants”). The Series A Warrants and the Series B Warrants have an exercise price of $1.07 per share and are exercisable immediately upon issuance. The Series A Warrants have a term equal to five years from the date of issuance, and the Series B Warrants have a term equal to 18 months from the date of issuance.
Reworded paragraphs (15)
Previous wording
We are a knowledge and science-driven company that applies artificial intelligence (“AI”) to support the discovery and development of optimal cancer therapies, which can ultimately lead to more effective treatments and improved patient outcomes. We use AI and a proprietary biobank of 150,000+ tumor samples, categorized by tumor type, to provide actionable insights about drug compounds to improve the drug discovery process and increase the probability of drug compound success. We offer a suite of solutions for oncology drug development from early discovery to clinical trials.
Current wording
We are a knowledge-driven company focused on applying artificial intelligence (“AI”) to support the discovery and development of optimal cancer therapies, which can ultimately lead to more effective treatments and improved patient outcomes. We use AI and our proprietary biobank of 150,000+ tumor samples, categorized by tumor type, to provide actionable insights about drug compounds to improve the drug discovery process and increase the probability of drug compound success. We also create and develop tumor-specific 3D cell culture models mimicking the physiological environment of human tissue, enabling better-informed decision-making during drug development. Our suite of solutions supports oncology drug development from early discovery to clinical trials.
Previous wording
Since inception, we have been unprofitable. We incurred net losses of $10,494,794 and $10,508,620 for the nine months ended September 30, 2024, and 2023, respectively. As of September 30, 2024, and December 31, 2023, we had an accumulated deficit of $178,256,677 and $167,761,883, respectively.
Current wording
Since inception, we have been unprofitable. We incurred losses from continuing operations of $2,285,416 and $3,564,105 for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025 and December 31, 2024, we had an accumulated deficit of $182,869,144 and $180,426,271, respectively.
Previous wording
We have never generated sufficient revenues to fund our capital requirements. We have funded our operations through a variety of debt and equity instruments. Since 2017, we have diversified our business by investing in ventures, including making significant loans and investments in early-stage companies. These activities led to the acquisition of Helomics Corporation in April 2019, two transactions to acquire the assets of three businesses in 2020, and the acquisition of zPREDICTA Inc. in November 2021, each of which have accelerated our capital needs. See “Liquidity and Capital Resources – Liquidity and Plan of Financing; Going Concern” and “Liquidity and Capital Resources – Financing Transactions” below.
Current wording
We have never generated sufficient revenues to fund our capital requirements. We have funded our operations through a variety of debt and equity instruments. Since 2017, we have diversified our business by investing in ventures, including making significant loans and investments in early-stage companies. These activities led to the acquisition of Helomics Corporation in April 2019 and the acquisition of zPREDICTA Inc. in November 2021, each of which has accelerated our capital needs. Since 2023, we have monetized certain assets and curtailed expenses to focus on our mission. See “Liquidity and Capital Resources – Liquidity and Plan of Financing; Going Concern” and “Liquidity and Capital Resources – Financing Transactions” below.
Previous wording
Our future cash requirements and the adequacy of available funds depend on our ability to generate revenues from our oncology business located in Pittsburgh; our ability to continue to sell our Skyline Medical products and services and to reach profitability in all our businesses; and the availability of future financing to fulfill our business plans. See “Liquidity and Capital Resources – Liquidity and Plan of Financing; Going Concern” below.
Current wording
Our future cash requirements and the adequacy of available funds depend on our ability to generate revenues from and reach profitability in our oncology business located in Pittsburgh and the availability of future financing to fulfill our business plans. See “Liquidity and Capital Resources – Liquidity and Plan of Financing; Going Concern” below.
Previous wording
Comparison of three and nine months ended September 30, 2024, and 2023
Current wording
Comparison of three months ended March 31, 2025, and 2024
Previous wording
As a result of the strategic cost savings initiative, historical results of the former Birmingham operating segment have been reflected as discontinued operations in our condensed consolidated financial statements for all historical periods presented in the statements of net loss. Assets and liabilities associated with the former Birmingham operating segment are classified as assets and liabilities of discontinued operations in our condensed consolidated balance sheets. Additional disclosures regarding discontinued operations, including results from discontinued operations, are provided in Note 2 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Current wording
As a result of these developments, the former Birmingham and Eagan operating segments have been reflected as discontinued operations in the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Additional disclosures regarding discontinued operations, including results from discontinued operations, are provided in Note 2 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Previous wording
Cost of sales. Cost of sales was $196,919 and $97,868 in the three months ended September 30, 2024, and 2023, respectively. The gross profit margin was approximately 43% and 86% in the three months ended September 30, 2024, and 2023, respectively. The decline in gross profit margin for the three months ended September 30, 2024, was primarily due to increased labor costs and a change in sales mix with decreased sales of 3D models with higher margins than STREAMWAY systems.
Current wording
Cost of sales. Cost of sales was $45,118 and $22,433 in the three months ended March 31, 2025, and 2024, respectively. The increase in cost of sales in the three months ended March 31, 2025 was primarily due to increased direct labor. The improvement in gross profit margin was primarily due to increased sales of 3D models in the three months ended March 31, 2025.
Previous wording
General and administrative expense. General and administrative (“G&A”) expense primarily consists of management salaries, professional fees, consulting fees, administrative fees, and general office expenses. G&A expense decreased by $761,949 to $1,582,671 in the three months ended September 30, 2024, compared to $2,344,620 in the comparable period in 2023. The decrease was primarily due to decreased employee compensation related to lower headcount related expenses and severance for former employees.
Current wording
General and administrative expenses. General and administrative (“G&A”) expenses primarily consist of management salaries, professional fees, consulting fees, administrative fees, and general office expenses. G&A expenses decreased by $497,464 to $1,828,200 in the three months ended March 31, 2025, compared to $2,325,664 in the comparable period in 2024. The decrease was primarily due to decreased professional fees, decreased business taxes, and decreased employee compensation, partially offset by increased legal fees. Professional fees decreased due to lower usage of consultants and outside advisors. Business taxes decreased due to timing of payments. Employee compensation decreased due to lower headcount. Legal fees increased due to corporate development transactions pursued during the three months ended March 31, 2025.
Previous wording
Sales and marketing expense. Sales and marketing expenses consist of expenses required to market and sell our products including staff-related expenses for individuals performing this work. Sales and marketing expense decreased by $87,789 to $246,650 in the three months ended September 30, 2024, compared to $334,439 in the comparable period in 2023. The decrease was primarily due to lower employee compensation including sales commissions.
Current wording
Sales and marketing expenses. Sales and marketing expenses consist of expenses required to market and sell our products including staff-related expenses for individuals performing this work. Sales and marketing expenses decreased by $605,077 to $3,633 in the three months ended March 31, 2025, compared to $608,710 in the comparable period in 2024. The decrease was primarily due to decreased employee compensation, including severance related to a former executive recorded in 2024 and a reduction in headcount following separation of marketing employees in the third quarter of 2024.
Previous wording
Net cash provided by financing activities of continuing operations was $4,134,970 and $260,221 for the nine months ended September 30, 2024, and 2023, respectively. The cash provided in the nine months ended September 30, 2024, was primarily due to proceeds from the issuance of common stock pursuant to the ATM offering completed in May 2024 and proceeds from the exercise of warrants into common stock pursuant to the Warrant Inducement Transaction in July 2024.
Current wording
Net cash provided by financing activities of continuing operations was $2,499,687 in the three months ended March 31, 2025, compared to $112,372 used in financing activities of continuing operations in the three months ended March 31, 2024. Cash provided by financing activities of continuing operations in the 2025 period was primarily related to proceeds from the exercise of warrants into common stock, proceeds from the issuance of common stock pursuant to the Extension Agreement with Renovaro, and proceeds from the issuance of common stock pursuant to a Registered Direct Offering, while the cash used in the 2024 period was primarily repayment of a note payable used to finance insurance premiums over the insured period.
Previous wording
Net cash used in discontinued operations was $861,576 and $1,293,359 for the nine months ended September 30, 2024, and 2023, respectively. Net cash used in operating activities of discontinued operations was $893,576 and $1,046,745 for the nine months ended September 30, 2024, and 2023, respectively. This change primarily relates to changes in working capital. Net cash provided by investing activities of discontinued operations was $32,000 for the nine months ended September 30, 2024, while net cash used in investing activities of discontinued operations was $246,614 for the nine months ended September 30, 2023.
Current wording
Net cash provided by discontinued operations was $854,494 in the three months ended March 31, 2025, compared to $706,332 used in discontinued operations in the three months ended March 31, 2024. Net cash provided by operating activities of discontinued operations for the three months ended March 31, 2025, was $229,494, while net cash used in operating activities of discontinued operations for the three months ended March 31, 2024, was $706,332. This change primarily relates to increased collections of accounts receivable from customers in the 2025 period. Net cash provided by investing activities of discontinued operations was $625,000 for the three months ended March 31, 2025, which related to proceeds from the sale of Eagan assets pursuant to the asset purchase agreement executed with DeRoyal. No cash was used in investing activities of discontinued operations for the three months ended March 31, 2024.
Previous wording
We have incurred significant and recurring losses from operations for the past several years and, as of September 30, 2024, had an accumulated deficit of $178,256,677. We had cash and cash equivalents of $3,078,955 as of September 30, 2024, and need to raise significant additional capital to meet our operating needs. We had short-term obligations of $3,816,766 and long-term operating lease obligations of $1,704,453 as of September 30, 2024. We do not expect to generate sufficient operating revenue to sustain our operations in the near term. During the nine months ended September 30, 2024, we incurred negative cash flows from continuing operating activities of $8,913,589. Although we have attempted to improve our cash flows from continuing operating activities by bolstering revenues and continue to seek ways to generate revenue through business development activities, there is no guarantee that we will be able to improve our cash flows from continuing operating activities sufficiently or achieve profitability in the near term. As a result of these conditions, substantial doubt exists about our ability to continue as a going concern within one year after the date our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are issued.
Current wording
We have incurred significant and recurring losses from operations for the past several years and, as of March 31, 2025, had an accumulated deficit of $182,869,144. We had cash from continuing operations of $3,087,588 as of March 31, 2025, and need to raise significant additional capital to meet our operating needs. We had short-term obligations of $4,609,043 and long-term operating lease obligations of $1,405,004 as of March 31, 2025. We do not expect to generate sufficient operating revenue to sustain our operations in the near term. During the three months ended March 31, 2025, we incurred negative cash flows from continuing operating activities operations of $985,840. Although we have attempted to improve our cash flows from continuing operating activities by bolstering revenues and curtailing expenses and continue to seek ways to generate revenue through business development activities, there is no guarantee that we will be able to improve our cash flows from continuing operating activities sufficiently or achieve profitability in the near term. As a result of these conditions, substantial doubt exists about our ability to continue as a going concern within one year after the date our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are issued.
Previous wording
We are evaluating alternatives to obtain the required additional funding to maintain future operations. These alternatives may include, but are not limited to, equity financing, issuing debt, entering into other financing arrangements, or monetizing operating businesses or assets. These possibilities, to the extent available, may be on terms that result in significant dilution to our existing stockholders or that result in our existing stockholders losing part or all of their investment. Despite these potential sources of funding, we may be unable to access financing or obtain additional liquidity when needed or under acceptable terms, if at all. If such financing or adequate funds from operations are not available, we would be forced to limit our business activities and we could default on existing payment obligations, which would have a material adverse effect on our financial condition and results of operations, and may ultimately be required to cease our operations and liquidate our business. Our condensed consolidated financial statements as of and for the three and nine months ended September 30, 2024, included in this Quarterly Report on Form 10-Q, have been prepared assuming we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.
Current wording
We continue to evaluate alternatives to obtain the required additional funding to maintain future operations, but there can be no assurances that such funding will be available under acceptable terms, if at all. Alternatives to obtain additional funding may include, but are not limited to, equity financing, issuing debt, entering into other financing arrangements, or monetizing assets. These possibilities, to the extent available, may be on terms that result in significant dilution to our existing stockholders or that result in our existing stockholders losing part or all of their investment. For example, in February 2025, we issued shares of our common stock in a registered direct offering for gross proceeds of $545,004. Also, in March 2025, pursuant to an extension agreement in connection with the LOI with Renovaro, Renovaro purchased shares of our common stock for an aggregate of $500,000. In March 2025, we entered into an asset purchase agreement pursuant to which we sold and assigned assets and liabilities exclusively related to the business of providing products for automated, direct-to-drain medical fluid disposal, including our STREAMWAY product line, for $625,000, plus assumed liabilities. Despite these sources of funding, we may be unable to access additional financing or obtain additional liquidity when needed or under acceptable terms, if at all. If such financing or adequate funds from operations are not available, we would be forced to limit our business activities and we could default on existing payment obligations, which would have a material adverse effect on our financial condition and results of operations, and may ultimately be required to cease our operations and liquidate our business. The condensed consolidated financial statements as of and for the quarterly period ended March 31, 2025, included in this Quarterly Report on Form 10-Q, do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if we were unable to continue as a going concern.
Previous wording
The transactions described above closed on July 26, 2024. Wainwright acted as the exclusive placement agent for the above-mentioned transactions. The Company paid Wainwright as consideration (i) an aggregate cash fee equal to 7.0% of the gross proceeds from the exercise of the existing warrants, (ii) a management fee equal to 1.0% of the aggregate gross proceeds from the exercise of the existing warrants, (iii) $35,000 for expenses, and (iv) $15,950 for clearing fees. Additionally, the Company issued to Wainwright (or its designees) as compensation, warrants to purchase up to 67,068 shares of common stock of the Company (equal to 7.0% of the aggregate number of existing warrants exercised in the offering) (the “Placement Agent Warrants”). The Placement Agent Warrants have a term of five years from the closing of the offering and an exercise price of $1.65 per share.
Current wording
We agreed to pay Wainwright an aggregate fee equal to 7.0% of the gross proceeds we received from the sale of the securities in the offering as well as a management fee equal to 1.0% of such gross proceeds, and $15,000 for fees and expenses of legal counsel. We also issued to Wainwright, or its designees, warrants to purchase up to 7.0% of the aggregate number of shares of our common stock sold in the transactions, or warrants to purchase up to an aggregate of 25,434 shares of our common stock (the “Registered Direct Offering Placement Agent Warrants”). The Registered Direct Offering Placement Agent Warrants are exercisable for five years from the commencement of sales in the offering and have an exercise price equal to 125% of the purchase price of shares of our common stock sold in the offering, or $1.875 per share. The Registered Direct Offering Placement Agent Warrants and the shares issuable upon exercise of the Registered Direct Offering Placement Agent Warrants were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and in reliance on similar exemptions under applicable state laws.
Previous wording
There were no financing transactions during the nine months ended September 30, 2023.
Current wording
There were no material financing transactions during the three months ended March 31, 2024.